FTSE tumbles as pound rises on Brexit talk

Market report Emma Newlands

The FTSE 100 slumped and the pound pushed to two-month highs as investors cheered reports that the UK has agreed to pay as much as £50 billion to settle its EU divorce bill, in a move that could open the door for trade talks.

The UK currency was up around 0.7 per cent at $1.344 against the US dollar, hitting its highest level since 28 September. Versus the euro, sterling climbed 0.5 per cent to €1.132.

The pound’s ascent weighed on the FTSE 100, which fell 67.09 points to 7,393.56. Investors were taking reports of the higher Brexit bill offer as a potential sign of a breakthrough in talks between British and EU officials.

David Madden, a market analyst at CMC Markets UK, said: “The FTSE 100 is being held back by the rally in the pound on the back of the announcement the UK Government has agreedinprincipletomakeapaymenttotheeu.

“The so-called divorce bill is believed to be in the region of £50bn and this is seen as a boost to British political prospects.”

In UK stocks, London Stock Exchange Group shares ended the day higher by 5p at 3,805p. The group confirmed that chief executive Xavier Rolet was stepping down with immediate effect. Additionally, Lloyds Banking Group shares rose 2.27p to 67.1p amid news that it will close 49 branches and axe almost 100 jobs.

The biggest risers on the FTSE 100 included Next up 189p to 4,503p, Kingfisher up 13.5p at 336.5p,and Marksandspencergroup up 11.4p at 312.4p. The biggest fallers included Randgold Resources down 440p at 6,915p, Sage Group down 31.5p at 779p and Fresnillo down 49p at 1,303p. Housebuilder Telford Homes has assured it remains “firmly on track” for higher annual earnings despite posting a fall in half-year profits and sales. Shares fell as investors digested the news that the cinema chain was in advanced takeover talks with US cinema giant Regal.